Imagine you're at a fairground holding a five-year municipal bond. In front of you are four buckets labelled highly liquid, moderately liquid, less liquid and illiquid. The goal is to throw the bond into the correct bucket.
That, in a nutshell, is the US Securities and Exchange Commission's (SEC) liquidity bucket challenge – but the game is more complicated than it sounds.
Fund managers complain the SEC's new liquidity risk management rules, adopted on October 13, leave too much room for interpr